Sunday, November 29, 2009
By Scarlett Lu
Some people face bankruptcy but they do not understand it. It’s important to understand bankruptcy rules and when people should be filing for bankruptcy. However bankruptcy should be the last resort a company files for. Bankruptcy is a big step; it is a big change in every family’s life. There are 2 types of bankruptcy people can file for Chapter 7 Bankruptcy and Chapter 13 bankruptcy. We must determine which bankruptcy is right for us.
Chapter 7 bankruptcy is when most of your unsecured debts are written off within 90 days of filing. The bankruptcy will stay on your credit report for 10 years. While debts will be forgiven, you’ll have to sell some of your property. In most cases you may lose your home or something expensive you owe such as jewelry. Chapter 13 Bankruptcy is a repayment plan. Bankruptcy will remain in your record for 7 years. You set up a three or five year schedule with your creditors. You get to keep your home
Chapter 13 bankruptcy makes sense when debtor have fallen behind some payments and can still catch up and make up for it. Chapter 7 bankruptcy makes sense when you have no assets to lose.
We should make sure we are filing for the best bankruptcy that describes our situation.